Ahead of the anticipated launch of the iPhone 7 and iPhone 7 Plus in September, it's worth remembering these will not be the first new iPhone models released this year. March saw the lower priced iPhone SE revealed by Tim Cook and his team. While various iPhones have been targeted further down the price portfolio (notably the iPhone 5C), the SE is the handset that has managed to not only reach that price point but also be accepted by the press and the public.
That combination has increased the impact of the SE on Apple's ecosystem, and it points towards Apple's future in the hardware market.
A cursory glance at the iPhone SE's retail performance shows that demand for the handset continues to outstrip the supply of the handset. Arguably that means Apple has a hit, and will be working to manufacture more of the handset. At some point the logjam will be broken, and the SE will be left to run free through the Apple Stores and into the hands of a waiting public. At which point the SE's impact will be magnified.
Apple can expect the SE to bring down the average selling price it makes on each handset. While there will be a balance between lost sales to the SE compared to new sales (that may not consider the larger devices), the perception outside of Cupertino will be of a high-end product that is no longer a mythical money-making machine.
Being able to tell attractive stories around its products was once Apple's super power. Over the last year that ability has weakened with both Apple TV and the iPhone Smart Battery Case acting as prime examples of Apple's inability to resurrect the reality distortion field it once employed.
Where this lack of storytelling hurts is the overall perception of Apple: iPhones are getting cheaper, iPhones are running out of ideas and just delivering the same ideas again with a bit more speed, an iPhone is no longer 'one smartphone to rule them all' you need to choose between all the various handset combinations. At the launch of the iPhone SE, Apple's basic pitch was 'it's faster than other phones like this'. Which sounds decidedly un-Apple ish. To this day the SE is sold firstly on its diminutive size, and secondly on its high specifications. There was nothing fundamental news, there was no 'gee-whizz' in the iPhone SE. It relied on the momentum of the brand name.
That's a similar story to the upcoming iPhone 7 launch. While new technology is expected (including a dual lens camera, and a reliance on bluetooth or lightning cables to connect headphones) Apple is losing control of the story of the iPhone as many consider skipping this year's handset to look forward to 2017's iPhone 8.
Finally, the iPhone SE breaks the link at the lower end of Apple's smartphone portfolio to the rest of the range. Previously Apple had one major model released each year and this would slowly move down the range as the years passed, Apple now populates the three layers with three different devices. No longer is the iPhone one device to rule them all, it is a series of devices that are sculpted towards a specific audience and a targeted marketing brief
All that said, the iPhone SE should still be seen as a key product for Apple. No consumer electronics company can maintain the same strategy for decades. Switch strategies too quickly and you leave a lot of comfortable income on the table. Leave it too late and you miss the trends that drive the next generation of technology - a fate that befell Palm, BlackBerry, Nokia and others.
Steve Jobs forced Apple into a number of pivots - the dropping of the iPod Mini while it was the world's best selling MP3 player being one of the earliest and most visible moments. For Apple to retain its powerhouse status, Tim Cook needs to be able to demonstrate that not only he has the ability to recognise when Apple has to pivot, but also that he can time such a change correctly.
In the old way of things, the iPhone SE is the weak point. If Cook is correct, that weak point is going to be transformed into the fulcrum that will drive Apple forward over the next few years. If he has misjudged it, then the iPhone SE is the signpost to a long, slow descent from the financial peak it currently occupies.
Now watch my review of the iPhone SE:
